Shee Hamisi Mashipa v Mare Nostrum Limited [2021] KEELRC 1770 (KLR)

The court adopted Tuiyott J's reasoning in Re Arvin Engineering Limited that a purposive interpretation of Section 534(2)(b) is required so as not to disadvantage debenture holders holding pre-2015 instruments. Since the debenture empowered the Bank to appoint a Receiver and Manager whose powers and functions are akin to those of an administrator, the appointment is treated as an appointment of an administrator under the Act. The court stated it did not need to say more.

Relying on Section 561 of the Insolvency Act and the decision in Fredrick Okoth Owino v T.S.S Grain Millers, the court held that only the High Court has original jurisdiction to grant leave to continue suits against companies under administration. The Claimant's objections on publication of the appointment, delay and absence of threat of execution were arguments properly to be made before the insolvency court when seeking leave. Being satisfied the Respondent was under statutory administration, the court was required to stay the proceedings.

The Claimant alleged the appointment process was flawed because it was not published in the Kenya Gazette or advertised in local daily newspapers. The court found this averment of fact was not supported by any evidence and, in its view, did not vitiate the appointment of the Receiver and Manager.